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Melbourne is a cost competitive destination for foreign and interstate investors because it offers the lowest gas, office leasing costs and industrial land prices on Australia's eastern seaboard for certain sized business usage.

Melbourne's office leasing costs are the lowest on Australia's eastern seaboard

  • Melbourne is 44 per cent cheaper than Sydney and 3 per cent cheaper than Brisbane
  • Melbourne office leasing costs are A$545 per m2 per annum, Sydney's office leasing costs are A$787 per m2 per annum, and Brisbane's office leasing costs are A$566 per m2 per annum
  • Prices are net face rents and are exclusive of incentives

Source: Colliers International Research, First Half 2018

Melbourne's industrial land prices are the lowest on the eastern seaboard

  • For land 1-5 hectares:
    • Melbourne is 54 per cent cheaper than Sydney and 27 per cent cheaper than Brisbane
    • Melbourne's price is A$193 per m2, Sydney is A$420 per m2
  • An example of a 1-5 ha industrial land user is data centre, pharmaceutical factory, food processing factory

Source:  Knight Frank Research, June & September 2017

Melbourne's gas prices are the lowest on the eastern seaboard

  • For a medium gas user site of 10,000 GJ per annum:
    • Melbourne is 30 per cent cheaper than New South Wales and 47 per cent cheaper than Queensland
    • Melbourne's price is A$14.31 per GJ, New South Wales is A$20.30 per GJ and Queensland is A$26.94 per GJ.
  • An example of a medium user would be a small-scale food processing plant
  • Prices are for delivered retail natural gas
  • Invest Victoria commissioned Energy Advice to prepare a report comparing electricity and gas pricing of a variety of customers across Victoria, New South Wales and Queensland, that is, the eastern seaboard of Australia
  • The report benchmarked three types of gas users based on consumption
  • EnergyAdvice was recently acquired by Energy Action a leading provider of Energy Procurement, a contract management & energy reporting and projects & advisory service

Source:  EnergyAdvice, Electricity and Natural Gas Independent Price Comparison Report September 2017 (commissioned by Invest Victoria)

Scenarios were created for three delivered retail natural gas user types based on consumption.

Delivered retail natural gas

User types

  1. User of 1,000 GJ pa (volume tariff)
  2. User of 10,000 GJ pa (demand tariff)
  3. User of 5000,000 pa (demand tariff)


  • Analysis included three gas distributors in Victoria
  • Comparisons were made with metropolitan New South Wales and Queensland
  • Prices have been based on forward prices and environmental charges
  • Network tariffs, where applicable, have been included in forward prices


  1. Annual consumption is prorated on the basis of number of days in the month.
  2. Energy rates are as per the rates received from various retailer responses to procurement activities - average price is used.
  3. Fixed/transmission rates for New South Wales & Queensland are as per rates received from various retailers (converted to $ per max daily quantity per day) from procurement activities, average price is used; for Victoria, regulated prices are used.
  4. Energy and fixed/transmission rates are subject to CPI escalation. This is included where appropriate.
  5. The injection point into the VIC transmission system is assumed to be Longford.
  6. 60 per cent load factor is assumed for the 10,000 GJ scenario & 75 per cent load factor is used for 500,000 GJ scenario to calculate MDQs.
  7. 40 per cent load factor is assumed for 10,000 GJ scenario & 50 per cent load factor is used for 500,000 GJ scenario to calculate MHQ.
  8. Distribution costs are based on the current distribution charges as at July 2017 uplifted for estimated future price increases.
  9. New South Wales & Queensland network charges are based on Jemena only - DC-4 & Envestra Brisbane area respectively.
  10. Metering charges are assumed to be A$500 per month per site for the Victorian sites consuming 10,000 GJ & 500,000 GJ - New South Wales and Queensland metering charges are bundled into distribution charges.
  11. For the 1,000 GJ per annum scenario bundled retailer tariffs for each region have been applied. There is an assumption of a 16 per cent cost increase from January 2018 for Victoria and a 10 per cent increase from July 2018 for New South Wales and Queensland for the first year and 5 per cent per annum thereafter.
  12. There is no allowance for additional charges that may be incurred for usage outside of the contract parameters.
  13. All prices are GST exclusive and in Australian dollars.